One week after Avis Budget Group announced its foray into premium service, the company on Wednesday announced its second-quarter revenue fell flat year over year amid what it called a "pullback" in business travel demand.
ABG executives didn't talk much about the corporate segment on Wednesday's earnings call, but in supplemental material the company released it noted that its second-quarter leisure rental days showed "mid single-digit growth" which it said more than offset "a pullback in commercial."
"What we're seeing in terms of [revenue per day] isn't all that different from what other participants in the travel industry are seeing. I think demand is firming up post the passage of the Big Beautiful Bill," said new ABG CEO Brian Choi, referring to the U.S. spending bill that President Donald Trump signed into law earlier this month. "For us, leisure is stronger than commercial right now, and pricing is more challenged than volume."
Choi, who took the reins as CEO on July 1, spoke at length about Avis First, the company's new premium service that includes a concierge, luxury cars, and airport curbside pick-up and drop-off. Choi suggested it was an overdue move not only for his company but also the rental car industry as a whole, given travelers' acceptance of premium-class service and pricing in other supplier categories.
"Everyone knows Delta is more premium than EasyJet, but Delta customers also understand the difference between main cabin, Comfort Plus, first class and now Delta One," Choi said. "The airline industry figured out that the post-Covid traveler is happy to pay more for certainty, for quality and for experience. It's not just about the lowest price. It's about the value received. Avis First addresses that expectation head on."
Currently available in 12 U.S. locations, Choi said the company planned Avis First to be operational in "over 50 markets … by the end of the year."
Avis Budget Q2 Metrics
Avis Budget reported second-quarter revenue of $3 billion, about the same as in the second quarter of 2024. Americas revenue declined 1 percent to about $2.3 billion, while international revenue increased 3 percent to about $707 million.
Net income was $5 million, compared with $15 million one year prior.
Total second-quarter rental days decreased by less than one percentage point year over year to about 44.9 million. Revenue per day declined to $67.06 from $67.69.
Americas rental days increased about 1 percent to nearly 33.3 million. Americas RPD declined to $70.06 from $71.67.
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